Friday, April 25, 2008

Prince Leases Giant House in Beverly Park

According to the gurls who write the Wall Street Journal's Private Properties column, high heel wearing rock star royalty Prince recently leased this house in the guard gated Beverly Park community for $200,000...

...Per month.

Can you hear Your Mama gasping for air and reaching for the nerve pills?

Two hundred thousand dollars is a lot of damn money for to lease a place to live and throw parties even if the house measures in at around 30,000 square feet. The "Tuscan-style" extravagance is also available to purchase for a blistering $50,000,000. Property records, reports and rumors all say that the owner of the home is George Santopietro, who built the behemoth on speculation.

Prince may be special, but he isn't the only royal on this particular Beverly Park block. Several of the homes across the street are owned by the Saudi royal family. On one side of Prince's temporary palace is Rockstar Energy Drink founder Russ Weiner, who forked over $15,000,000 for his 16,000 (approx.) square foot house in February 0f 2007, and on the other side is the above mentioned Mister Santopietro, who was once married to letter turner Vanna White.

UPDATE LATER SAME WEEK: Your Mama heard from Mister Sunshine that Mister Prince only leased this house for one month during which he and his people threw a may-jah party for the Academy Awards. So maybe one of you Bev Park le can shoot us an email and let us know if His Petite Purpleness is (or is not) shacking up in Mister Santopietro's spec house.

Actually, for that monthly rent he could barely pay a teaser rate mortgage (not to mention property taxes)! This sounds like a lot of money (ok, for 99.99% of the population it is an ungodly amount of money), but it's a horrible losing proposition for Weiner and his investors, trying to hang in there until the market improves. Next step is foreclosure!

I hope Mr. Santopietro thought to include a clause in the lease forbidding Prince to do another purple makeover like the one he did on the Sierra Alta Way estate in Hollywood Hills he rented awhile back. It belonged to film and music producer Ted Fields at the time, and is now owned and for sale by Prince's soon-to-be new next door neighbor Russ Weiner.

Mama wrote about it back on July 9, 2007:

"Well don't you know that Prince, egomaniac that he is, went and made unauthorized alterations to the house that included painting the exterior of the house with purple stripes, one of those stoopid symbols The Little Purple One used as his name a few years back, and the numbers "3121," the name of the album he was releasing at the time.

But The Little Purple One did not stop there. Oh no. He had the carpet in a downstairs bedroom removed and replaced with black carpeting. Apparently, he also removed baseboards and cut a large hole in the wall, presumably to run water pipes to the beauty salon chairs he installed. Because you don't get to looking like Prince looks without a team of make up people, hair dressers, and a couple hours in one of those a beauty chairs that spins, tilts, and twirls.

You think that would be enough, but it was not. The Little Purple One also had the carpet in the master bedroom removed and replaced with purple monogrammed carpeting Your Mama presumes the new carpeting was monogrammed with that ree-dick-u-lus symbol."

hey anon 8:16i'm not sure what you're talking about, but after reading pretty carefully, both this posting as well as the one on weiner's place, i've come to the pretty well informed conclusion that he does own the house. just out of curiosity, where did you read otherwise?

My dad and mom have done consulting for GNC, Twin Lab, Nature's Herbs and Amway, developing products for them throughout the '80s and '90s. I also worked with a flavor company. It took a year-and-a-half and 700 formulas. I would tell them what I wanted it to taste like. I gave them the list of ingredients. And then, I'd tell them what to add in, what to take out, a little, more, let's say, vanilla, a little more raspberry. Lower the guarana level, raise the ginseng level. Back and forth, literally, that's why it took so long.

I mortgaged my condo in Sausalito and I went for it--$50,000 was all it took. I basically went to Southern Wine & Spirits, which is the largest liquor distributor (in the nation). I said, "Hey, I have an energy drink. I've got a warehouse full of it." And I didn't. I had one mock-up can. They said "All tight, we'll try it."

(banging the brownie pan on the edge of the trash can..brownie crumbs scattering on the floor, muttering)...

Damn children. I was never one of those Mama Mamas that asked for grandchildren and I'd trade this lot for a bottle of gin right now. Don't listen to a damn thing their elders say or they would have ignored that piss ant white trash and be enjoying my homemade brownies. They should have stuck with the weiner dogs and that bitch cat.

keep in mind that these comments get posted to the internet via bots, I know most of you are joking on here

but......

there are commenters from other blogs that are getting caught up in multi million dollar lawsuits and they are 30 and live with their mom or dad and their lives are getting turned upside down.

they are getting sued and harassed in the real world for making to many deflamatory comments about someones estates worth, net worth, lively hoods some have been accused of causing millions to be lost in an estate sale or sales were canceled because of their stupid comments.

keep in mind that these moguls have law firms with 20 lawyers at a minimum, security, private detectives all working for them 24 / 7 and their job is to make the oppositions lives difficult.

Think of them as sharks, they do not bother you if you do not bother them but get on their radar in a bad way and watch out

FYI to pay an attorney to file an answer against a real lawsuit is 5k minimum, which I know many of you on here do not have, it is either that or a judgement that will end up on your record.

I am just sayin.

keep it light and have fun but do not keep on trashing someones estate over and over again because you do not like it or them.

what will you do when you get a process server serving you a 2MM lawsuit because they felt your comments caused them to lose 2MM in a sale ?

That is why the media in general is very responsible for what they say out there.

I am sure as these lawsuits are won, blogs will come under fire as well and the owners will keep more of a tight leash, most of them already require comment approval, because a few bad apples ruin it for the rest of us.

I know a lot of this occurs because I work as a consultant from time to time in these matters.

so again I would not go around directly attacking the owners over and over again on an individual basis, esp if you do not want them legally attacking you.

now that you called on me, I might as well post this, and now after reading this article, I think some of the ultra rich are going to end up cash poor, or they will be in another country/island when the crash happens out here, I will have my 10 years of living to live off of, but then again they say the world will end in dec 21 2012 when the our galaxy is at the center of the milkyway and the alignment of the planets and the sun causes the earth to wobble for a few days, but who knows ?

google it if you do not believe me

December 21 2012

Back to the article, very interesting, it touched on points I did not think about, this guys is a GENIUS !!!! he is telling his friend why she should wait until after the crash to buy a house.

it came from another blog.

ENJOY !!!!!

XXXXXX, I am delighted to explain. Some of this is theory and some is fact, but I feel very confident I am painting a very accurate portrait.

The early part of this decade was marked by the bursting of the tech bubble and 9-11, and resulting subsequent economic disruption. The many free trade agreements signed during the 1990's led to bleeding of middle-class manufacturing jobs that used to be the backbone of our economy. Since Bush took office, nearly 4 million manufacturing jobs have been lost. But it goes beyond that. American companies, looking for increased profits, have outsourced millions of white collar jobs so that careers that were supposed to be "the wave of the 21st century", such as computer programminng, engineering, and other high-tech areas, have continued to see negative growth.

In order to keep the economy going, the government did a series of unwise things. Our leaders were happy to have our economy heavily dependent on consumer spending (nearly 75% of total GDP) and debt (consumers have had a negative savings rate the past several years: only time since the Depression!). Moreover, the government greatly expanded legal immigration through H1B and L1 Visas. Much of this was done at the behest of the business community, which has continuously sought cheaper labor costs.

Part of the reason for this increased immigration was that the government wished to stimulate economic activity by expanding the population. Consistent with this, the government wished to greatly expand homeownership, in order to boost the land development and homebuilding industries, along with other related industires such as landscaping, real estate brokerage, and home improvement (Home Depot, etc.). Bush (also known as the Worst President in History: rest easy James Buchanan) regularly boasted about the "ownership society".

Of course, as has always been the case, these millions of first-generation immigrants (along with American renters) had little to no savings and work in service jobs with generally low household income. Notwithstanding that fact, the government and the private sector did a number of things to enable this homebuying orgy. All of these actions were unwise in the long run and are coming home to roost now.

First, Fed Chairman Allan Greenspan, the most overrated public official in American history, lowered rates more than 15 times and kept them extremely low far beyond what was dictated by circumstances. The rate cuts allowed the mortgage industry to offer unprecedented levels of adjustable-rate mortgages to unqualified borrowers, many using "teaser rates" that have huge built-in increases. The rate cuts also encouraged increased consumer borrowing for an already debt-laden society. This allowed Bush to brag about economic growth and "the ownership society" but the consequences of the rate cuts have been enormous. Consumer debt has led to unprecented levels of foreclosures and bankruptcy. The rate decreases have destroyed the value of the dollar. Now the impact of the rate cuts is being felt in terms of inflation. They have been a factor in the huge spikes in oil prices, as more people invest in commodities when dollar-denominat ed investments fall in value and inflation expectations rise.

Of course, the biggest factor in the increased oil prices has been demand from China and India. This was an unintended consequence of the aforementioned globalization, as American companies have been all too happy to outsource their production to the cheaper labor markets. Needless to say, retailers like Wal-Mart have been happy about these developments, and they have pushed hard for expanded so-called free trade. But the rapid growth of these overpopulated (both over 1 billion) third-world backwaters has hugely impacted global oil supply.

Another factor has been the greedy developers and greedy financial industry. These greedy developers, with state and local officials in their pockets, have managed to get subdivision after subdivision approved, many over the objections of the local communities. Because these developers control the politicians, they have not been forced to pay any impact fees. Consequently, taxpayers have been forced to pick up the tab for roads, schools, hospitals, and other infrastructure needs that have exploded due to unprecedented levels of hombuilding activity. Of course, this unprecedented growth has impacted traffic, the environment, schools, hospitals, and every other aspect of quality of life. Now states across the country, led by California, are going bankrupt as they try to keep up with all these costs. An unspoken factor in all of this is the fact that the homes have been built by an enormous wave of illegal immigrants from Mexico, who have been illegally hired by the greedy builders and developers. Needless to say, these low-wage, low-skill (Mexican immigrants average a 7th grade education) immigrants have been an enormous burden on social services, not to mention traffic and other factors.

As noted above, the government sought ways to put millions of people in these homes. The private sector contributed to this effort by disregarding the most basic banking fundamentals. Whereas lenders would hold mortgages in portfolio years ago, they almost never do today. Consequently, they have no concern whatsoever about the repayment capacity of the person to whom they are lending: they make their income from the origniation fees. The aforemenntioned Greenspan rate cuts allowed these lenders to offer adjustable-rate mortgages with very low rates. The lenders could then sell the loans to private investors, who would chop the pools of loans up into thousands of pieces and sell them as CMO (Collateralized Mortgage Obligations) or CDO (Collateralized Debt Obligations) tranches. Since worldwide rates have been very low, investors seeking higher yield have been all too happy to buy these, as they general ly did offer higher yields. Those investors were usually hedge funds and foreign governments, as American consumers with their negative savings have no money to invest.

Needless to say, since these CMO's and CDO's were so esoteric and chopped up, it is doubtful that anyone knew what they were holding. But no one worried because the investments were secured by American homes and, as we all know, residential real estate always increases in value (sarcasm font). What the investors didn't count on was artificial home price inflation caused by compromised lending standards (no down payment, no verification of employment and income, low credit scores, minimal job history, and high debt-to-income ratios) and "flippers", those investors that came in and drove prices up in hopes of selling the home they don't live in and making a quick buck. The CMO's and CDO's were given the AAA stamp of approval from all the rating agencies, including Moody's, Standard and Poor's, and Fitch. Of course, what people did not know (and the lazy American media failed to report) was that these agencies were getting huge fees directly from the bond issuers, a nd they were therefore interest-conflicted and incentivized to give good ratings.

The run-up in home prices, and the unsustainability thereof, were demonstrated by price-rent ratios. These ratios have historically moved in tandem but became hugely out of whack in recent years, a true red flag that the homes were overvalued. If one wasn't inclined to look at these ratios, they could simply apply common sense. Here in Atlanta, the median household income is less than $60,000 per year. Yet you can't touch a new home for less than $250,000. It doesn't add up. And, in terms of home price compared to household income, Atlanta is way better off than places like LA, Phoenix, Washington DC, Las Vegas, and Miami. But, once again, our lazy media was asleep at the switch.

The growth in homebuilding and homeownership was greatly fueled by government-sponsored agencies FNMA and FHLMC. Historically, subprime and more marginal mortgages have been sold to private investors. The primo stuff has historically been sold to "Fannie" and "Freddie", who have securitized the mortgages into CMO's and CDO's as described above. But, during the current decade, Fannie and Freddie bent their standards and they purchased and securitized billions (maybe trillions) of mortgages they would not have done previously. Consequently, a number of economists are predicting that an enormous taxpayer-funded bailout of these agencies will be necessary.

Upon taking office, President Bush appointed a Texas banking buddy, Donald Powell, to be FDIC Chairman. Mr. Powell ran a small national bank in Texas that came within an eyelash of failure in the early 1990's. Powell had a severe disdain for regulation and regulators and immediately proceeded to gut the staff. He publicly stated that "all of these small community banks could fail and it would make no difference." He implemented the MERIT program, which equated to drive-by examinations. Banks throughout the nation (particularly here in Atlanta) proceeded to go crazy making nothing but Acquisition, Development and Construction loans to developers and builders. These local bankers lent millions to developers without regard to the fact that those borrowers were overleveraged and they continued to lend like crazy even when it became evident that the market was oversupplied. Underwriting was poor, to say the least. In other words, bankers did exactly what the banking industry did in the 1980's only on a bigger scale.We as regulators stood by and let it happen. Now, development loans are defaulting at an incredibly rapid rate and the financial industry is likely to see massive bank failures.

So there it is. Incompetent government leadership, excessive desire by government leaders to make GDP and job growth numbers look good, corporate greed and short-sightedness, have led to an implosion of unprecedented magnitude. And the sad thing is that all of it could have been prevented by applying the most simple and basic fundamentals. But greed, politics, and stupidity took over.

As I have stated before, when the dust settles, this largely government-induced financial and economic implosion, which I think will rival the Depression, will be an even greater black mark on the nightmare that is the Bush legacy than even Iraq.

after the hedge funds go out of business, I am sure we will see desperate rich playboys selling or trying to sell their estates, penthouses at firesale prices in manhattan, sunset plaza, malibu, sf, chicago with no buyers in site ? how low ? 50,60,70,80 % off ?

could be, from my conclusion of one point of the article, the hedge fund business should have been illegal to create in the first place. Without it there would be far less billionaires, hecta millionaires, multi millionaires, and real estate would be up 20% vs 1500%

Tell me I and tens of millions of others like me are wrong !!!

good day and now please start with the insults, give me your best shots !!!!

btw I am in Ibiza Spain right now away from this chaos and they and others are laughing all the way to the bank.

The share of homes vacant and for sale, an important measure of the nation's housing supply, set a record in the first quarter in a signal that the glut of homes on the market isn't improving.

The homeowner vacancy rate, which measures the number of vacant homes for sale, rose to a record 2.9% in the first quarter from 2.8% in the fourth quarter, about one percentage point higher than normal, according to new Census Bureau data. The vacancy rate has jumped nationwide and in cities, suburbs and rural areas since the housing bubble popped. From 1995 until the fourth quarter of 2005, the rate held between 1.5% and 2%.

About 2.2 million vacant homes were for sale in the first quarter, up from 2.1 million in the fourth quarter and about one million more than was typical before the housing bubble burst.

Economists say the rising vacancies indicate that home prices won't stop falling and home builders can't ramp up construction until the glut of vacancies can be worked down.

"It's the worst piece of housing news that we've heard in the past couple of months," said Patrick Newport, U.S. economist at Global Insight. "It means home prices will continue to drop at least for the remainder of the year."

Meanwhile, a record 4.1 million vacant homes are for rent, with the rental vacancy rate rising to 10.1% in the first quarter.

And don't bother insulting me because I am posting from Mars. I paid the Russians 30 million euros to be on the first unmanned spacecraft to Mars. They were going to send a monkey but I convinced them to send me instead.